IDS resigns, Osborne falters

On Friday Iain Duncan Smith resigned from the Cabinet as secretary of State for Work and Pensions. A report in the BBC notes that “Duncan Smith has warned that the government risks dividing society, in his first interview since resigning as work and pensions secretary. He attacked the “desperate search for savings” focused on benefit payments to people who “don’t vote for us”. And he told the BBC’s Andrew Marr his “painful” decision was “not personal” against Chancellor George Osborne. Downing Street said it was sorry to see Iain Duncan Smith go but was determined to help “everyone in our society”.

The piece adds “Duncan Smith told the BBC he had supported a consultation on the changes to Personal Independence Payments but had come under “massive pressure” to deliver the savings ahead of last week’s Budget. The way the cuts were presented in the Budget had been “deeply unfair”, he said, because they were “juxtaposed” with tax cuts for the wealthy. He criticised the “arbitrary” decision to lower the welfare cap after the general election and suggested the government was in danger of losing “the balance of the generations”, expressing his “deep concern” at a “very narrow attack on working-age benefits” while also protecting pensioner benefits”.

A report in the Guardian notes that the resignation will damage the leadership hopes of George Osborne, “By uttering the heresy that George Osborne’s fiscal targets are “arbitrary”, forcing the government to make “unfair” cuts, Iain Duncan Smith risks pulling down the whole doctrine of austerity that has sustained the chancellor’s reputation. An admiring biography of Osborne by the Financial Times journalist Janan Ganesh styled him the “austerity chancellor”; but Duncan Smith carefully set his view that the pursuit of the targets, ceilings and rules Osborne has erected have ultimately perverted the “one-nation Conservatism” that should protect the most vulnerable. George Osborne has long-coveted the prize of the Tory leadership. But Duncan Smith’s sudden and dramatic resignation crystallised nagging concerns about the chancellor within his own party. The bookmakers William Hill said on Saturday it had pushed Osborne’s odds of being the next prime minister from 2/1 favourite to 7/2 second favourite, and shortened Boris Johnson from 3/1 to a 15/8 clear favourite. William Hill’s spokesman, Graham Sharpe, said: “So sure-footed for so long, Mr Osborne was widely regarded as Cameron’s natural and chosen successor, but recent blunders seem to have dealt him a serious blow to achieving that outcome.” It is a sentiment increasingly widely shared in Westminster, where what one backbencher said an “Anyone but George” campaign was gathering force”.

The report goes on to make the point that “The climbdown over disability benefits and the loss of Duncan Smith is just the most damaging of a series of recent revolts, including a defeat in the House of Commons over Sunday trading laws and the “tampon tax” rebellion, which forced the prime minister to discuss the issue with his EU counterparts. And last summer, in what was boldly styled Osborne’s first Conservative budget after the party unexpectedly won a majority in May’s general election, he introduced the deep cuts to tax credits that were subsequently overturned by the House of Lords, another embarrassing U-turn. In his devastating interview with the BBC’s Andrew Marr on Sunday, Duncan Smith said he had also had qualms about these plans, which were introduced to meet the Conservatives’ bold pre-budget promise of cutting £12bn from the nation’s welfare bill. This time, in a bid to avoid similar embarrassment, some budget proposals, including a fuel duty rise and a cut in tax relief on pensions contributions that would have hit higher earners, were ditched even before they went to the printers, as Downing Street sought to avoid any noise in the runup to June’s referendum. In order to secure the leadership, when the prime minister steps down at some point before 2020, Osborne would have to win over enough backbenchers to make it through to the final two candidates, who are then put to grassroots members for a vote. Osborne had already been eclipsed by Brexiteer Boris Johnson in the hearts of many individual members, who tend to be more Eurosceptic than the Tory party in parliament”.

Crucially the piece notes that “Osborne, and to some extent Cameron with his pre-election pledges to pensioners and other groups, has trapped himself and his party in a straitjacket of his own making. His promise to deliver a surplus on the public finances by 2020 was far more about stymying a Labour party struggling with its own attitude to austerity than the national interest. And the welfare cap, similarly, was more a political stunt, aimed at isolating Labour as the friends of scroungers and skivers, than a well-thought-out policy. Yet by tying himself and his party up in all these pledges, promises and targets, the chancellor ended up delivering a budget that – as Duncan Smith pointed out – couldn’t possibly be construed as fair in its own terms”.

Pointedly the article concludes “While the public may approve of the general idea of bringing down the welfare bill, they also understand that politics is about choices, and targeting the disabled while giving extra cash to wealthy shareholders fails the most basic tests of fairness. It also plays to the most damaging caricature of Osborne, as the privileged son of a baronet, keener on protecting his wealthy friends than helping ordinary Britons: something he has fought hard to shrug off by introducing his “national living wage”, for example”.

A related piece discusses the place IDS played in “reforming” welfare, “was midway through complicated reforms that he has struggled to make work. In office he displayed a reforming zeal that mixed Victorian morality with a determination to tear up the bureaucratic framework underpinning the Department for Work and Pensions. It has been a troubled department, with five ministers for disabled people in six years. Aside from accusations of unfairness, Duncan Smith’s reforms have often been characterised by incompetence in their implementation, and a failure to save the money promised”.

Similarly a report notes why IDS really resigned. It posits five main reasons the first of which is what is said at face value, “Duncan Smith says he is resigning because he cannot accept the cuts to the personal independence payment (PIP), and his argument on this sounds sincere. He says the cuts are “a compromise too far” (meaning a compromise with austerity too far). He says he cannot justify the cuts if they are part of a budget that also cuts taxes for the rich. Duncan Smith has questioned the way cuts have been targeted in the past; before the election he let it be known that he thought there was a case for putting the squeeze more on wealthy pensioners, and means-testing the winter fuel payment, so it is not as if his concerns are 100% new. But nevertheless it is odd that he has decided to resign now, when his department announced the PIP cuts a week ago”.

The second point the article makes is PIP being the last straw, “Resignations are not normally triggered by a single event, and Duncan Smith’s decision to go is the culmination of a feud with the Treasury that has been going on for years. It has been focused on universal credit, Duncan Smith’s flagship policy at the Department for Work and Pensions, and a measure that is currently being rolled out nationwide. Universal credit is supposed to simplify the welfare system, by combining six benefits in one, but, crucially, it was also intended to increase the incentive to work, by ensuring that working always pays more than staying on benefits. However, under pressure from the Treasury,the mechanics of universal credit (tapers, the work allowance etc) have repeatedly been changed, with the effect of making the benefit less generous and the work incentives much weaker”.

The article goes on to argue that there was a personal feud between Osborne and IDS that also helps explain the resignation, “Duncan Smith blames George Osborne and the Treasury for undermining universal credit. But this is partly personal too. Relations between the two have never been entirely harmonious since Matthew d’Ancona published his book about the coalition in which he quoted Osborne telling allies that he thought Duncan Smith was “just not clever enough”.

The article does mention that the EU is a factor, “Duncan Smith’s resignation is not directly related to the EU referendum. But he is one of the six members attending cabinet who is backing Brexit, and for him fighting the EU is one of the great causes of his political career. Normally a sense of collective enterprise helps cabinet ministers to stick together even when they disagree strongly, but what the EU referendum has done is loosen those bonds”.

Lastly it contends that IDS may have been pushed from DWP and therefore decided to jump, “David Cameron is expected to hold a significant reshuffle if he wins the EU referendum (if he loses, it will be another prime minister’s reshuffle) and Duncan Smith was widely expected to be moved or sacked at that point. In the last parliament Cameron tried to get him to move from DWP to Justice. On that occasion Duncan Smith said no, and his status as a former party leader helped keep him in post, but after more than six years in office this summer, he would no longer be in a strong enough position to resist. Sensing that his career at DWP was coming to an end anyway, he may have decided it was best to go on his own terms”.

Amid all the chaos the government quickly appointed the Welsh Secretary, Stephen Crabb MP as the replacement of IDS. His firs act was to concede that the cuts to PIP were not only counterproductive but immoral and would be reversed, “David Cameron has been forced to concede that a £4.4bn black hole created by the U-turn over disability benefits will not be filled by further cuts to welfare as he fought to shore up his credibility following the shock resignation of Iain Duncan Smith. The spending climbdown was announced on Monday by Stephen Crabb, the new work and pensions secretary, an hour after Cameron addressed the political crisis engulfing the Conservative party by offering his support to George Osborne and praise for the work of Duncan Smith. Aiming to strike a conciliatory tone in the Commons, Cameron said Duncan Smith had “contributed an enormous amount to the work of this government” in his work campaigning for welfare reform, which he said had reduced child and pensioner poverty and inequality”.